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Linda T. Fisher 5500 Consulting, LLC Newsletter
Keeping You Informed!
January 2013
Greetings!

Happy 2013 to all! 2013 represents something special to my family and I; it was the address of my childhood home that my parents owned for over 50 years! Back then, homes were much smaller, especially ours, and we were 6 people in a 1,000 square foot house. We were 4 girls, mom and dad and we all shared one bathroom. So dad had to wake up very early to get in and out before the women woke up. And we were very happy. Hoping 2013 is just as happy for all of you! 

 

As the calendar turned to 2013, the government started to release new updates that we bring to you in the articles below. Cheers to a great start to the upcoming year ahead!!

 

We continue to provide Form 5500 related government updates in addition to providing helpful articles. We know that you likely have more responsibilities than just Form 5500 preparation, so to keep you in the loop, we are providing 5500 related guidance directly to you! Stay tuned each month to learn about:

  • Solutions to Common Errors;
  • Dept. of Labor and IRS Updates;
  • Specific Schedule Guidance; and 
  • Training Offerings!
Did you miss any prior Newsletter issues? 
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In This Issue
2012 Draft Form 8955-SSA Changes
Tax Preparer PTIN Rules Suspended
2012 Draft Form 5500-EZ Changes
Start the New Year With 5 Time Management Tips!
2012 Draft Form 8955-SSA with Instructions Posted
 

Though we are still waiting for the final version of Form 8955-SSA with instructions, the IRS posted drafts of these back in October 2012. Here are the changes to be aware of based on these drafts:

  • Non-Standard Page 2's will not be accepted anymore - Non-standard pages 2's to report additional separated participants will not be accepted by the IRS. We are now required to use standard Form 8955-SSA page 2's, rather than custom created spreadsheets or other non-standard formats.
  • Instructions Clarify Whom to Count on Lines 6a and 6b - As mentioned in prior newsletters, with so much confusion around whom to count on lines 6a and 6b, the 2012 instructions finally clarify! They state: "Do not include any participants on line 6a or 6b who were previously reported on a Form 8955-SSA or a Schedule SSA. Accordingly, only those participants who are listed with an Entry Code A on page 2 should be included on lines 6a or 6b." This guidance finally confirms that only Code A's are technically required to be reported, and Entry Codes B, C and D are considered optional. HOWEVER, you as preparers should be reporting all entry codes to prevent potential time-consuming research caused by Social Security correspondence sent to terminated participants that informs them of a benefit they may have previously received.
  • Encouraging all filers to submit electronically - This will ensure accurate entries and save time (and our tax dollars) required for manual entry from the paper forms submitted.
  • Need to report terminateds on correct year's Form 8955-SSA - For example: If Entry Code A information for the 2010 plan year was previously reported, then that information should not be reported on the 2011 Form 8955-SSA again, unless you are correcting erroneous entries as Entry Code B's.
  • New website for future Form 8955-SSA developments will be posted at: www.irs.gov/form8955ssa.
  • For term vested reporting for plan years prior to 2009, to report terminated participant information that should have been reported on a Schedule SSA, you are to enter and submit this information on Form 8955-SSA instead. 
  • Added guidance for Code D entries states not to report participants as a Code D just because they returned to service. System programming or manual research is required to review whether they were reported as a Code A with a benefit due to them at termination.
Tax Preparer PTIN Rules Suspended

Though Form 5500 preparers are not currently required to obtain a PTIN, pass a test and attend continuing education each year, there have been concerns that these requirements could eventually affect them. So we have good news to share on this issue:

 

On January 18, 2013, a federal court ruled that the IRS lacked authority to require tax preparers to register with the government, pass a competency test, and meet education requirements. 

    

This ruling affects almost 100,000 tax return preparers who have paid the required PTIN application and testing fees which, in total, add up to more than $100 million.  If this ruling is not successfully appealed the IRS can expect to face demands for refunds.

   

U.S. District Judge James Boasberg in Washington invalidated the IRS' PTIN related regulations and he claimed that the IRS overstepped its authority by relying on an 1884 law that allowed it to regulate people presenting cases before the Treasury Department.

 

He stated - "Filing a tax return would never, in normal usage, be described as presenting a case. At the time of filing, the taxpayer has no dispute with the IRS; there is no case to present." 

 

The rules were designed to impose standards on hundreds of thousands of return preparers who aren't CPA's, attorneys or enrolled agents already licensed to practice before the IRS. The idea was to require minimum qualifications and help the agency combat tax fraud.

 

The IRS program has been accused of favoring large corporate providers of tax services such as H&R Block Inc. and Intuit Inc. over smaller independent return preparers, said Dan Alban, an attorney with the Institute for Justice. 

 

The IRS responded by suspending the program on January 23, 2013 but they plan to appeal this decision. 

 2012 Form 5500-EZ Draft Has Been Posted
On January 9, 2013 the IRS posted the 2012 Form 5500-EZ draft for your review and planning. Usually drafts versions end up looking just like the final version. 

 Here is a summary of the changes to be aware of:

  • A question was added (line items 4a and 4b) to report the plan's trust name and trust EIN. This new question is optional, however, we encourage you to complete it so the trust EIN is noted by the IRS and will not be deleted from their records, as has happened for some. If the plan uses more than one trust account, the primary trust information should be entered here. 
  • New "Paid Preparer's name" line has been added underneath the signature line on Page 2. It is noted as "Optional," and is asking for the preparer's name, address, and phone number, not just the firm's name that they work for. Since the Form 5500-EZ is not posted publicly like the rest of the Form 5500 series, there are less concerns of providing this information. We recommend you discuss this internally to decide as a company whether you want to fill these lines in on the Form 5500-EZ.
  • Due to the new trust EIN question 4, note that the numbering for all items after line item 4 are different by one number, so be careful when comparing current year to prior questions or when requesting information.
  • For defined benefit plans only, Line 11a was added to report the amount reported on Schedule SB, line 39.

For Defined Benefit Plans

Schedule MB

  • Lines 4d and 4e - instructions (page 53) that have been clarified; and
  • Multi-employer actuarial information reporting has been clarified for changes in adjustable benefits, and for amortization charges under the funding standard account statement.

Schedule SB

  • Line 11b, instructions (page 67), request additional detail for the prior year's excess contributions to be added to the pre-funding balance; and 
  • Actuaries preparing the 2012 Schedule SB should reference IRS Notice 2012-61 for guidance regarding the Moving Ahead for Progress in the 21st Century Act.
We Can Assist With Form 5500 Preparer or Reviewer Training!


Save time by turning the training task to us!
 

We know that effective Form 5500 training is hard to find. We can train you and your team on a variety of Form 5500 topics. Whether you have an experienced team that just needs to brush-up on new changes since last year, or you have new Form 5500 preparers that need the full training package, let us know. 
 
Is Schedule C still an area of confusion? We can assist with training that will get you on the right track for very low cost.
 
Are you a Form 5500 reviewer that is ultimately responsible for your filings'  accuracy but don't have a good understanding of what it all means? We have an excellent Reviewer Training session that addresses the more important line items and potential red flags.  
 
You and your people deserve to know more!  Click for more about our training offers! 
5 Time Management Tips

Are you achieving your goals for the new year? Our gift to you - a few time management tips to continue your success!

 

 

1. Set Goals and List Priorities - Document both short-term and long-range goals; allocating specific blocks of time to each. Goals should be put in writing and reviewed frequently. A goal that is not in writing is merely a dream.

 

2. Make a 'To Do' List and follow through on it. List your tasks in order of priority, with deadlines. Update as you complete each task. Several To Do lists can help with balancing daily tasks while keeping longer term projects in focus.

 

3. Delegate - You can't do everything. Even though you may have been asked to complete a task, and believe you can do it better and faster, others may be needed to assist. Your time is limited and others need to be empowered.

 

4. Stay OrganizedAvoid the cluttered desk syndrome - a clear desk helps you to think clearly, locate papers easier and keep your mind on the task at hand. When working on several projects at one time, note where you left off so you can easily pick it up again.

 

5. Keep focused on the task at hand and finish before you move to the next one. Minimize the number of times you look at email. Work on your most challenging tasks when you more alert and productive. Are your mornings quiet and the best time for concentration? Or are you a night person and more creative and focused then?

 

 

 


We would love to hear from you! Your comments and questions regarding this newsletter and future topics are important to us!

Click here to provide your feedback!
 
Sincerely,
 

Linda Fisher
Linda T. Fisher 5500 Consulting, LLC
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Our Mission
Linda T. Fisher, owner of Linda T. Fisher 5500 Consulting, LLC  has prepared and managed Form 5500 filings for 18 years and serves as a technical resource for fellow employee benefit plan professionals and plan sponsors that prepare their own filings. 
 
She is fully aware that as employee benefit laws change, it becomes challenging for plan sponsors to keep current with all filing requirements. 
 
Our mission is to educate all those responsible for Form 5500 preparation and review. We do this through our preparation services, offering training programs for both preparers and reviewers, along with 'as needed' coaching.